Lagos, Nigeria – The Dangote Petroleum Refinery, a $20 billion project owned by billionaire industrialist Aliko Dangote, is facing mounting challenges as marketers increasingly turn to cheaper imported refined petroleum products. Operators in Nigeria’s downstream oil sector are now urging the Federal Government to intervene and address critical issues affecting the refinery’s viability.
Market Preference and Cost Disparity
The Independent Petroleum Marketers Association of Nigeria (IPMAN) reports that local marketers are favoring imported diesel and aviation fuel due to their lower cost compared to Dangote’s products. The refinery’s higher pricing has led to reduced patronage, raising concerns about its long-term sustainability.
Crude Oil Supply Concerns
Operators emphasize the need for a consistent supply of crude oil to the Dangote refinery. Without adequate raw material, the refinery’s production capacity remains underutilized. The government’s intervention in ensuring a steady flow of crude oil is crucial for the refinery’s success.
Anti-Country Practice and Collaboration
International oil companies operating in Nigeria have been accused of selling crude oil to the Dangote refinery at prices above global market rates. This practice undermines the country’s economic interests. Additionally, Aliko Dangote’s refusal to collaborate with IPMAN has affected the refinery’s competitiveness. IPMAN leaders stress the importance of reducing prices to encourage local consumption.
Export Potential and Government Licenses
Despite local challenges, the Dangote refinery has managed to export over 3.5 billion liters of diesel and aviation fuel to Europe in recent months, accounting for 90% of its output. However, the refinery’s survival hinges on addressing cost-related challenges. Notably, the Dangote Group is the only company among the 25 licensed refinery projects in Nigeria to have successfully delivered on its promise.
Conclusion
As Nigeria aims for energy self-sufficiency, collaboration between stakeholders and government intervention are essential for sustaining ambitious refinery projects like Dangote’s. The situation remains a topic of national interest, and further developments will be closely monitored.
